Jeff Bezos dethrones Elon Musk to become the richest person on earth again

Elon Musk has taken back the title of richest person in the world
Jeff Bezos attends "The Lord Of The Rings: The Rings Of Power" World Premiere in Leicester Square on

New York CNN  

As per the Bloomberg Billionaires Index on Monday, Jeff Bezos has surpassed Elon Musk to regain his position as the richest person on the planet.

The Amazon founder’s net worth was $200 billion, while Musk followed at $198 billion. Musk has lost about $31 billion over the past year, while Bezos has gained $23 billion, according to the index.

Tesla shares had tumbled more than 7% on Monday.

In May 2023, Musk regained his position as the richest person in the world by surpassing Bernard Arnault, CEO of LVMH (LVMHF), the head of one of the largest corporations in the world, which owns brands including Louis Vuitton, Dior, and Celine. For months, Musk, Arnault, and Bezos—the three centibillionaires—have been vying for the top position. The title had been held by Arnault as his fortune increased as a result of a surge in sales of luxury items that raised the price of LVMH's stock.

Musk became one of the richest persons in the world when his 2018 pay package, which was valued at over $50 billion, was overturned earlier this year by a Delaware state court judge. Year-to-date, Tesla shares have also dropped by almost 24%.

Of course, the title of the richest person on earth swaps every few months, depending on markets performance. Musk and Arnault continue to be extremely wealthy. According to Oxfam's annual inequality report, since 2020, the combined net worth of the world's five richest persons has increased by 114%, or $869 billion, after accounting for inflation.

Elon Musk is once again the world’s richest man

Elon Musk has taken back the title of richest person in the world.

This is in line with a Bloomberg Billionaires calculation that pegged the CEO of Tesla (TSLA) at $192 billion, while the CEO of LVMH (LVMHF), Bernard Arnault, is estimated to be worth $187 billion.

For months, the two centibillionaires—a term used to describe individuals with fortunes above $100 billion—have been in a virtual tie for the top rank.

Based on assessments by Bloomberg, Arnault's fortune declined this week following a Wednesday decline in LVMH's stock.

In December, Arnault overtook Musk in terms of wealth growth, which was fueled by a surge in sales of luxury products that raised the price of LVMH's stock. LVMH, a global company, is the home of renowned brands such as Dior, Celine, and Louis Vuitton.

Musk, meanwhile, has enjoyed a meteoric rise up the world’s rich lists in recent years as his fortunes are directly linked to those of Tesla, the electric automaker. His biggest asset is the company’s stock, of which he owns about 13%, according to Bloomberg.

Outside of Tesla, Musk is also CEO of SpaceX, the space exploration firm, and the owner of social network Twitter (TWTR).

While Tesla's shares have increased 65.6% so far this year, LVMH's have gained 19.7% this year. 

Judge strikes down Elon Musk’s massive, multi-billion-dollar pay package

New York CNN 

A Delaware state court judge has thrown out the 2018 pay package that helped to make Tesla CEO Elon Musk one of the richest people in the world.

Musk and the Tesla board "bore the burden of proving that the compensation plan was fair, and they failed to meet their burden," according to a ruling made on Tuesday by Delaware Chancery Court Chancellor Kathaleen McCormick, who presided over the bench trial that came to an end in November 2022.

The 303 million split-adjusted stock options that Musk had received as part of the package are worth $51 billion today, when calculated using Tuesday’s closing price, less the modest exercise price of $23.34 a share.

The case was heard in Delaware, the incorporation state of Tesla and numerous other significant US firms. Musk tweeted on Tuesday, "Never incorporate your company in the state of Delaware," despite not having an instant response to the announcement.

In a second tweet, he stated, "If you prefer shareholders to decide matters, I recommend incorporating in Nevada or Texas." Additionally, he posted a poll on X inquiring as to whether Tesla ought to relocate its corporate headquarters to Texas, the state in which it was founded. 88% of those who responded to the poll had not yet cast a ballot as of 7 am ET.


Attorneys for the shareholders who brought the suit had argued that the package of stock options was excessive and that the directors on Tesla’s board were not truly independent and were too close to Musk to protect shareholders’ interests.

They also argued that the financial targets the company had to hit for Musk to qualify for each of the 12 separate blocks, or “tranches,” of stock were not the “stretch performance goals” as the company told shareholders when seeking their approval of the package. Instead, they argued the milestones were essentially the same as the company’s internal growth projections that were being shared with banks and rating agencies. 

“We are enormously grateful for the court’s thorough and extraordinarily well-reasoned decision in turning back the Tesla board’s absurdly outsized pay package for Musk,” said a statement from Greg Varallo, one of the plaintiff’s attorneys in the case. He said Tesla investors will benefit from the decision by having the “dilution from this gargantuan pay package erased.”

Attorneys for Musk and the Tesla board argued the pay package was approved by a shareholder vote. Excluding the votes owned by Musk and his brother, 73% of the shares voting in that election supported the pay package.

They also argued that the shareholders had seen their Tesla shares massively increase in value since it was granted. The company’s market cap was valued at $54 billion at the time the pay package was approved. It had risen to $607 billion as of the close of trading Tuesday, a gain of more than 1,000%. The Tesla attorneys argued that Musk was a key to that rise in the company’s value and that the pay package was therefore reasonable compensation.

The Tesla attorneys also argued that Musk, who does not receive a cash salary or bonus, would be uncompensated if the package was thrown out.

Judge rejects Tesla’s argument

But McCormick rejected the argument that Musk would be uncompensated if the package was thrown out, writing, “Musk’s preexisting equity stake provided him tens of billions of dollars for his efforts.”

McCormick also found that the Tesla board was not acting as the check on Musk and his pay that it was supposed to be, arguing that Musk was calling the shots on the pay package.

While CEO compensation is supposed to be determined in a good-faith negotiation between a company’s governing board and the executive who both have different goals, “Musk launched a self-driving process, recalibrating the speed and direction along the way as he saw fit,” she wrote

The entire process was “deeply flawed,” the judge wrote, with compensation committee members including Antonio Gracias, a personal friend of Musk’s that often took family vacations with the Tesla CEO, as well as Todd Maron, “Musk’s former divorce attorney and whose admiration for Musk moved him to tears during his deposition.”

“Given the collection of people tasked with negotiating on Tesla’s behalf, it is unsurprising that there was no meaningful negotiation over any of the terms of the plan.”

Musk wants another big payday

Musk recently stated that in order to guard against outside investors taking over the company, it is critical that his share in Tesla be expanded.  

"Growing Tesla to be a leader in robots and AI without having about 25 percent voting control makes me uneasy. Not so much that I can't be overthrown, but enough to be influential anyway, Musk stated in a post on X. "I would prefer to build products outside of Tesla unless that is the case."

He said at that time the Tesla board was waiting for the court to make a decision in this case before it moved ahead with a new pay package.

Musk will lose the 303 million options he currently has to raise his Tesla ownership if the ruling is reversed on appeal, plaintiff's attorney Varallo told Newsreedom late on Tuesday following the ruling.

Varallo claims that while the Tesla board can approve Musk's new compensation package, it cannot mislead investors about how difficult it will be to meet the package's financial milestones or that a committee is in charge of negotiating the terms while Musk makes the final decisions, as the judge determined in this case. And he said he doesn’t think that changing Tesla’s incorporation to another state will make it easier to get approval.

“I think most states corporation systems have the idea you don’t lie to people,” he said.

He is the outright owner of roughly 13% of the company's stock. By virtue of the options he lost, he would have held approximately 20.6% of the shares. He declared his intention to own a minimum of 25% of the company's shares.

The Delaware Supreme Court is the appellate court for this ruling.

To prevent Musk from becoming sidetracked by his other interests and to keep him focused on Tesla's achievements, a few experts and investors have argued that Tesla should consider offering Musk a new compensation package.

He is the principal shareholder and CEO of SpaceX, a privately held space exploration business. In 2022, he bought Twitter and rebranded it as X. He also has a company called the Boring Company that is developing ways to drill tunnels more cost effectively and an AI company called xAI, which he started last year. In addition, he is the main proprietor of Neuralink, a company that has been developing implants to interface the human brain to a computer. Hi

Robyn Denholm, the chair of Tesla’s board, testified that the pay package was all about keeping Musk focused on Tesla.

“It was around motivating him to achieve things that were bold and audacious and him putting his time and energy into that as opposed to his other interests,” Denholm said in testimony in the case.

“Quite honestly, I don’t know how much it costs to do any inter-planetary travel. It’s not a hobby of mine,” Denholm said in response to questioning about Musk’s uses for the money.

Updates to this story include new developments and background.

Source CCN…


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